The Rules and Commandments of Property Bridging Finance

property-bridging-financeProperty Bridging Finance has become an effective and potent method that paves the way for asset acquisitions in spite of the timing constraints when it comes to permanent long term financing.

Because bank loans, sales, income generation and mortgages can take considerable time before they become available for use, many investors and buyers, individuals and organizations alike, have sought for Property Bridging Finance’s rescue.

It allows for the use of a short term temporary loan taken out for a few months to at most a year or two to be used for immediate needs and expenses spent in the search of and the purchase of a property at a time when one’s main fund source isn’t ready or available yet. It is a stop gap measure and connects the need and the financing, thus the term ‘bridging’.

Now just like any other method out there, there are a number of rules and commandments to be followed when using bridging finance and below is a list of them.

  • Transact with quality providers. Make sure to research and find out the best property bridging finance providers in your area. Different companies will vary in rates and terms so be careful as you compare. It would be great if you can find reviews and feedbacks about them.
  • Plan an exit route ahead of time. Albeit temporary, it is still a loan and it must be repaid at a future date. See to it that you plan its payment and closure ahead of time and prior to taking it which brings us to the next item on our list.
  • Choose a payment option that suits you. Property Bridging Finance providers allow borrowers to pay either at maturity date or before it as soon as one can and wants to.
  • Only borrow what is needed. Remember that this is a loan we’re dealing with so over-borrowing won’t be any good. Analyze and examine one’s needs and expenses to come up with a best estimate.
  • Budget and allocate the cash wisely. Property bridging finance unlike its long term counterparts is unrestricted in nature. This means that borrowers may use them whichever they deem fit and wish to. Although this is good news, it does not come with its drawbacks. Users must be disciplined enough to budget and allocate said funds in order to avoid wastages and shortages.


Get more info on bridging finance here: http://www.alternativebridging.co.uk

When Short Term Loans are Wise

Payday loans summitA short term loan is basically a loan with a maturity of five years or less. This is as simple as it gets. There are many types and uses to it and have become a very powerful medium by which both individuals and organizations are able to provide for their immediate cash flow needs. But we have to remember that their use is designed for a purpose and is not meant for everything and everyone. Today, find out when the use of short term loans are considered to be wise with the help from Alternativebridging.co.uk.

  • For Emergency Cases

Even the best companies need a helping hand when a dire situation arises. One can never be certain all the time and certain instances can hit the company leaving it shaken. This is true even with the presence of insurances. A short term loan becomes a safety net for emergencies; for example, natural calamities, accidents or machine breakdowns.

  • For Cash Flow Concerns

When there are not enough liquid funds to generate within one’s pocket and there is a need for instant funding, a short term loan becomes a smart choice without having to commit to any long term contract and wait up. These types of credit do not only cover a shorter period of time but are also able to make cash available faster.

  • For Seasonal Needs

There are cases where a business calls for help with fund shortages brought about by seasonal changes or event trends. Take for example a shoe manufacturing company. It gets an additional 50% order for the month of October thanks to a custom order. The added funds will be able to provide for the extra capital and staffing that one requires while waiting for the next revenue stream.

  • For Tight Situations

Long term loans are far trickier to apply for and the approval process is pretty taxing too. Let’s not forget how long it takes for the cash to be released. Startups and new business are also known to have a very slim chance with them. Good thing, short term loans are present to fix the dilemma.

  • For Growth and Expansion

Financing ventures can also call for short term loans says Alternativebridging.co.uk. The upfront capital here demands immediacy. For example, opening up a new branch may require the purchase of a lot. Of course a down payment is required here and a short term loan shall become a great choice to finance such part of the acquisition given its immediate availability.

How to Budget Property Expenses

expensesBuying a property is no easy deal. Come to think of it, the price tag on an asset is quite hefty on its own and not to mention there are numerous initial costs and post expenses that come after a purchase. One has to be able to budget and plan finances wisely if you want no trouble. Luckily, we’ve talked to the team over at Alternative Bridging and they gladly gave us a few tips!

Know your finance options. There are many options when it comes to financing an asset acquisition. There are short and long term alternatives which all come with their own set of pros and cons. It is important that you analyze your needs wisely so you can find a match that suits it best. Popular examples of funding methods or sources include savings, income, bank loan, mortgage, bridge loan and proceeds from the sale of one’s own asset.

Determine how much you will need. Make a list of all your expenses. You have to first know the property you are planning to purchase because the factors surrounding it will have a lot of bearing. Remember that you will have expenses before, during and after the purchase. You have to consider and include all of them in your list.

Be aware of your limits. Do not go beyond your means. We have different needs and reasons for the acquisition. At the same time, we have varying capacities when it comes to the amount we are willing and are able to spend. Be sure that you don’t go past your limit or all hell shall break loose.

Have the asset surveyed. To get a better grip on the asset’s market value, repair and maintenance costs and property taxes among others, it would be best to have it surveyed beforehand. Never close on a property without doing this. Apart from the numbers, this shall give you some validation as to the condition and life of the asset and whether or not they match what the seller says.

Provide a room for adjustments. It would be impossible to create a budget that matches your actual expenses down to the very last cent says Alternative Bridging so don’t expect it to do so. There will be some variances but your job here is to ensure that they do not go beyond a certain percentage or mark. It still has to be reasonable and within your numbers.

Bridging Loans and When to Use Them

short-term-bridge-loanBridging loans pertain to short term funding used as an interim source or where one has to connect the gap between an immediate need or debt coming due and one’s yet to be available permanent source of funding. Upon the arrival of the latter, the bridge shall then be closed using it. It is for this reason why it has been branded as a stop gap measure.

These bridging loans can be used for a multitude of ways and occasions and today we shall talk about some of them particularly those directed at real estate purchases.

Scenario No. 1: When You Need Resources for Your Search…

Looking for the ideal asset that suits both your needs and financial capacity will need funds. First of all you are likely to spend for a broker or agent. You will have to visit sites and transportation isn’t free. Plus, you will pay for surveyors to examine your prospect properties. If your main fund line hasn’t come through yet, you can use the bridge for the time being.

Scenario No. 2: When You Have to Close on a Good Property…

Time is of the essence because chances are you are not the only buyer who’s aiming to get their hands on a prime asset. The clock is ticking and you need to beat those competitors. The only way for you to get a firm hold and assurance would be to pay for the down payment and security deposit to close a deal. You need a significant amount to do that.

Scenario No. 3: When You Need to Uphold Business Continuity…

Businesses shall have to acquire properties in a timely manner and it should be done in accordance with a certain timeline or else operations shall be ruptured. Delays can occur and that equates to losses. Entrepreneurs want nothing of that and so they use bridge loans to make hasten their acquisitions and avoid such mishaps.

Scenario No. 4: When You’re waiting for A Property Buyer…

One of the many ways that buyers fund for their acquisitions would be through the proceeds of the sale of their present asset or that of a redundant or unused property. Unfortunately, such sales are not certain and they may not happen immediately as wanted. There is no certainty as to their timing which puts investors at a disadvantage. With bridging loans, buyers can already acquire and move into the new place all while waiting for a buyer on their old property.

Commercial Bridging Finance Payment Options

Commercial bridging finance companies like Alternativebridging.co.uk, offers real estate buyers a means to fund their short term liquidity requirements while their permanent resource line is still to be made available. It gets its name from the term ‘bridge’ as it acts to connect two transactions, the first being the sale and the second being the long term financial resource.

Commercial bridging finance is one of the six main types of bridge loans available today alongside open, closed, residential, land and auction types. Apart from providing fast, hassle free and immediate funds to aid in the acquisition of commercial assets, one of its most celebrated advantages would have to be regarding its payment.

You see, commercial bridging finance payment options are described as flexible. In other words, they’re not tight or rigid and limiting thus allowing buyers to not feel strangled and restricted by them but rather helped.

To explain it further, let’s compare the financing method to traditional forms of credit such as bank loans and mortgages. These two are characterized by a strict payment scheme that is scheduled in equal intervals, often in months, and has to be paid on the assigned dates. Full payment must also be completed at maturity.

finance loansBridge loans are not like that. They are considered flexible and non-restricting because users and borrowers have the option to pay them out before or at maturity. Let’s take the two following scenarios for better visualization.

Before Maturity – Should the investor or company be able to come up with the necessary funds equivalent to the value of the bridge taken out, they can already pay and close it even before it has matured or prior to the arrival and availability of one’s long term resources.

At Maturity – Commercial bridge loans and bridging finance in general often has a maturity date set to match the arrival of the anticipated long term fund sources. Since most users make use of the bridge only to pay upfront costs (e.g. down payment, legal expenses, first few installments, etcetera), they are likely to intend using their main fund line to close it out.

Commercial bridging finance and its flexible payment options is indeed a powerful tool for investors, organizations and business entities in their pursuit of acquiring the aforementioned real estate assets. It helps them to avoid opportunity losses, to cut on time, to save on costs brought about by time appreciation and to make use of the acquisition to encourage and boost up their profitability.

BTCJam: The Challenges of Personal Credit

BTCJAM-lendingWith the ever growing challenges of obtaining affordable credit, BTCjam was born in late 2012 and has continued to provide peer-to-peer lending services using Bitcoin. Founded by Brazilian software engineer, Celso Pitta, the company runs its office in San Francisco and has facilitated Bitcoin loans for more than ten million dollars in over two hundred countries worldwide.

The biggest challenge and concern of borrowers by far is the huge levels of interest rates required by traditional financial and lending institutions. Such rates even reach staggering numbers from one country to another. This makes them disadvantageous if not completely infeasible for majority of the population. Furthermore, a huge slump of paperwork is mandated making them very fussy and painstakingly troublesome for many.

Peer-to-peer lending has also been employed by companies similar to BTCjam but what sets the company apart is its ability to attain a wider geographical reach. This was done with the help of “machine learning”, an artificial intelligence designed to rate the reliability of borrowers worldwide. It is of no secret that most if not all financial and lending institutions will require the submission of credit scores. However, that is only mostly achievable by companies. People commonly do not have personal credit scores making it difficult for them to apply for loans. With “machine learning” technology, BTCjam is able to collect data leading to the creation of an instant credit score from their users. This is done upon registration where verifications will be completes building up one’s credit score.

When and How Does Bridging Finance Help Landlords

When it comes to their property investments, landlords will do everything to ensure that their entrepreneurial ventures go nowhere but up. In today’s very challenging real estate market, financing is very crucial to one’s success. After all, properties are often valued significantly. They do not come cheap. One of the popular modes of funding today among investors is the so called bridging finance. So we can’t all help but wonder why landlords favor them a lot? Read more to find out.

Bridging finance is an interim source of resources meaning that it provides for short term needs rather than long term ones. We all know that fixed assets have huge price tags. Not everyone has a bursting bank account filled with money waiting to be spent. There are many investors out there who will have to take on a mortgage, a bank loan or even sell an older property to raise funds for the new investment. The problem with those is that they take time and in the real estate business, time is of the essence. Miss out or procrastinate and your investments could turn unbelievably sour.

In most property acquisitions, the seller, broker or agent will require a down payment. This is required for all assets purchased on credit. There remaining balance are then to be distributed in equal installments within a certain period of time. With a mortgage, bank loan or sale of another asset, the funds can take time to arrive. When this happens, landlords and investors will not have ample resources to pay for the down payment causing them to lose hold of the property. This creates opportunity losses.

bridging-financeAt the same time, inability to have the resources when you need it is detrimental in these types of investments. Keep in mind that properties considered to be highly valuable or so called prime do not stay for sale in the market for long. Moreover, a long queue of people waiting in line should the first buyer default will be present. You need to play your best cards otherwise you will lose. You need to act fast if you want to get hold of the sterling asset.

In all of these cases, bridging finance helps by providing a quick and hassle free option for investors to provide for their short term needs, that is the down payment, initial installments and other expenditures relevant to the purchase. Need more advice? Visit www.alternativebridging.co.uk

How a Commercial Bridging Finance Can Help Your Company

Allow us to ask the question for you. How can a commercial bridging finance help entrepreneurs and their companies? Let’s take a look at the following scenario for better visuals, shall we?

commercial-financeMark is a restaurant owner who wishes to expand his business and open up a new branch in the metro. He has been in the food industry for two years now and business has been doing really well so a new place would certainly be feasible. This will not only widen the restaurant’s market reach and bring in more customers but it can also potentially increase sales and thus profits.

Mark then goes out in search for the best locations and properties for his upcoming branch. After scouring through the internet for hours, going over newspaper adverts and talking to various agents, he finally found the perfect asset. It’s situated right in the heart of the metropolis, has a wide and ample parking space, is sandwiched between establishments like malls, schools and parks, easily accessible for transportation and most of all fits his preferred budget. He goes ahead and applies for a bank loan to fund the transaction.

Here’s the catch though. The property is hot in the market and many buyers are willing to move heaven and earth just to get it. After all, it’s a prime asset. With the characteristics mentioned earlier, it will certainly put any company several steps ahead. Mark’s bank loan application has not yet been approved. We all know how these funding methods work. They take a lot of paper work and time most especially. What can Mark do now? Will he give up and move on to looking for another place? Is there even a workaround? Yes and with the help of a commercial bridging finance.

Commercial bridging finance is a type of interim funding method that caters to the short term needs of commercial property buyers. They are referred to as a “bridge” given their ability to connect and fill in the fund gap between the main or permanent source of funding, in Mark’s case the bank loan, and the acquisition in the event that the permanent source has not been made available in time. The application to approval process is pretty fast with lesser paper work involved too. The repayment methods are flexible and restrictions on the use of the funds are not around to hamper your strategies. This way, Mark will be able to acquire the property, use it for his restaurant and win against all the other buyers!

How to Get Commercial Bridging Finance to Work for Your Business

Commercial bridging finance is a short term financing method obtained by businesses to help them with their real estate acquisitions that are intended to be used for the entity’s operations.

The said loans are designed to fill in and provide for the cash gap that separates the acquisition of the property and the yet to be available or completed source of financial resources which include proceeds from sales and bank loans to name some. The thing with such sources is that they are not readily available. That being said, the asset that the business is eyeing on can be purchased by another entity or as what is usual in the real estate market, prices could go up. This is where bridging finance steps in to provide for the needed funds to supply for any initial expenses, the down payment for example.

commercial bridging financeCommercial bridging finance boasts a lot of benefits but as entrepreneurs and business people, how will you make sure that they indeed work to your advantage? Take into consideration the following tips.

1.    Find a trustworthy financial provider. – As is with every kind of loan or financing, it is imperative to only work with and get your needed funds from a trusted and reputable provider. One should ensure that they do not merely provide cash and impose interests. They too should aid the business in proper usage of the bridge. Apart from that they should have impeccable standing and feedback from clients.

2.    Assess your needs. – It is also important that you carefully and meticulously assess and examine the needs of your business. Is commercial bridging finance your only option? Are there any others and what are their pros and cons? How much do you actually need and when will your permanent financial source become available? You have to answer these questions and more to properly asses your situation and your needs best.

3.    Always plan your exit route ahead of time. – Bridge loans are after all still a loan. One should make sure that an exit route has been planned ahead. The payment methods for commercial bridging finance are pretty flexible. You can use the proceeds of your sale or your completed loan as soon as it arrives. Part of the amount is used to pay out the bridge loan while the rest are intended for the remaining balance on the asset acquired. There are other ways too such as the pooling of cash or restricted savings. Whatever payment option you choose, make sure that such exit route has been planned of ahead of time.

Popular Misconceptions about Bridge Loans

Almost everything, if not all, are surrounded by myths and misconceptions. You have myths regarding certain birthstones, about drinking water, regarding computer usage, about napping and pretty much everything. Sometimes there is just too much information for one to grasp and people are being mislead by things as they fail to dig deeper and research. The financing world is no different. Take bridge loans for example. Do you know that a lot of misconceptions surround it too? Get to know what these are with the help of Alternativebridging.co.uk’s team. We better straighten up our facts, don’t you think?

bridge-loansMyth Number 1: They are another debt and therefore another burden. – The very purpose and use of bridge loans is to connect and link the acquisition and the fund source in cases where the latter has been delayed or is not yet readily available. They provide funds equivalent to the amount needed for initial payment and the first few installments for the meantime. As soon as the main fund source becomes available, the bridge can then be closed or paid out using the same. This is why it has also been dubbed as a loan anticipating loan.

Myth Number 2: They come in towering levels of interests. – It is true that they do come in slightly higher interest rates but such are not so steep that they become impossible. The only time where the interest becomes towering is if you use this short term loan for more than what is suggested or required. Such slightly higher rate is only brought about by the higher risks involved.

Myth Number 3: They are strictly used for property acquisitions only. – Although they are popularly used in real estate acquisitions, they too can be used for other purposes by individuals, families, organizations or businesses. They are in the first place not defined to strictly cater to asset purchases only. They can be furnished for buying raw materials, a car or the like.

Myth Number 4: They can be used to replace regular loans. – If you refer back to its definition they bridge your fund source (e.g. bank loan, mortgage, sale proceeds, etc.) to the purchase. This then gives us the idea that bridge loans help or assist regular loans and should therefore not be used as one. Besides if you refer back to item number two, using them as your permanent fund line will become expensive over time. Think about it, if your recipe calls for a 175 degree Celsius oven then you should see to it that you conform otherwise you’ll end up with a mess.